7 Things Small Businesses can Learn from the Sparrow Sellout

People loved Sparrow, a clean and simple Gmail client for the Mac and iOS. But nobody knew by how much until they sold-out. The internet was just a buzz with unhappy people, myself included. Even their own investors were unhappy.

We won’t go into a debate on whether you are or not an entrepreneur if you’re looking for an exit strategy by selling to the highest bidder. But when Sparrow sent an email to me two weeks ago announcing they were acqui/hired (for a rumored amount of $25 Million) by Google, I realized that this is an excellent case study of what to do (or not to do) if you are running a small business looking to create an innovative solution for your customers.

1) Focused product
Sparrow is a simple and outstanding email client for Gmail. It is also one of my favorite Mac Apps, and possibly my most frequently used. What’s great about this App is that it focuses on one thing, email. And the App performed exceedingly well. I’m glad that the developers did not include other so-called “value-add” features such as reading RSS feeds or creating multiple folders etc.

Small business owners would soon discover that if they can maintain a strong focus in their business, products and service solutions, they can be very successful. Focus allows for clarity, and clarity is important for doing something well.

2) A product that fulfilled a need
Before Sparrow came along, we struggled with other email clients. Now that we know better, we demand better. The old saying is true, people don’t know what they don’t know. Sparrow succeeded in making other email clients look and “feel ancient“.

Customers don’t care about you, or your business, or your product range. They care about how you can solve their problems. If your solution is not solving a need, it is not likely going to make a long lasting impact in anyone’s lives. People talk a lot about branding and brand loyalty, but many forget the brand has to be useful first and cool bananas second.

I’ve seen, all too often, small businesses getting what I call “launch burn-out”. They spent so much time and energy on getting a product or service to market that once it goes out they either go on to something else or retire (or sleep!). Product or service launches should be seen as a marathon starting line, and not the finishing line. The real work begins when it launches.

4) Kept close to their customers
The sparrow team was very close to their customers, they listen to feedback (they did mine!), they got people to pick their next logo, and the even got their most loyal and fanatical customers to beta test their upgrades.

Small businesses have no reason not to get close to their customers, especially with today’s Social Media applications and Internet technology. I’m still surprised to see so many small businesses hiding behind distributors or retailers and not taking steps to better engage their customers. If you don’t do so, how can you understand what your ultimate end user needs or wants? And if you don’t know what, how can you make the right business decisions or improve your offering?

5) Don’t be Evil. Ok?
All things considered, Sparrow had a lot going for them. They were making hundreds of thousands of dollars, and their customers loved them.

Unfortunately since the sellout, their customers are now just angry for being left on the lurch. More so when many, including myself, found out that the developers were flogging the iOS versions for $0.99 (RRP $2.99) and the Mac version for $4.99. They did this from 19th June to the 13th of July. 7 days before the 20th July announcement of the Google purchase, and also that they will not be supporting the product (except critical bugs) in the near future.

Many people could not help wonder if they were taken for a ride, and all that goodwill they built up was destroyed. Small business need to realize goodwill is tough to build, but can by destroyed in one felled swoop.

6) Are you an entrepreneur or a business man?
I know we said we would not debate this, and we won’t. However small business need to decide if they are building something for the long term, or are they looking to get rich quick and get out. Great products and services need time to build and gestate.

Because of the nature and complexity of Design Thinking and Design Driven Innovation activities, it is naturally a long-term investment and commitment. So really, only the small businesses that are looking to build something awesome for their customer need apply.

Because of this, I would add “betrayed” to the list of emotions many people are feeling. If you don’t believe me, read the comments in all the articles I’ve linked to above.

Humans are strange creatures. When people are emotionally attached to something, it becomes hard to give up. Just look at Apple. Small businesses that want to beat the big organizations (that people feel nothing for) should consider this: Share with your customers why you get out of bed each morning to do what you do. The customers you want will walk the journey with you.

Brian Ling

Brian is the Founder and Design Director at Design Sojourn, a Design Led Innovation Consultancy. He is a multi-award winning design leader, and specialises in strategic design and innovation programs that drive successful organisations.
Brian’s 20-year career in design, driven through a deep understanding of human behavior, spans over multiple domains such as consumer electronics, government, healthcare, non-profit agencies, hospitality, F&B, retail, online solutions and best in class service experiences.